The recent slide in business confidence over the last twelve months has been reversed in a survey of just under a thousand businesses undertaken electronically by the Auckland Chamber of Commerce.

A net 26% percent of respondents believe that business conditions in New Zealand will improve over the next six months, the highest such figure since June 2010.

“While some signs of market confidence have returned, the underlying frailty in demand means that many businesses, particularly in the manufacturing sector, are still doing it tough,” commented Auckland Chamber Chief Executive Michael Barnett.

“We are still seeing many of the same reasons for companies feeling their own situation remaining flat or worsening in the near future.” Some of these reasons included:

Inconsistency or weakness in demand

The inability to access funding and finance from banks

Difficulties managing cashflow and working capital

Slow-paying customers

Other key survey findings were:

On confidence:

A net 43% of respondents believe their own personal business situation will improve over the next six months, compared with 38% in the February survey and 39% in the December 2010 survey

Overall, 38% of businesses felt the general conditions will improve over the next six months, compared with 35% in February and 32% in December 2010

On costs

55% of respondents expect their costs to go up in the next three months, compared with 45% in February

On prices

28% of respondents expect their selling price to go up in the next three months, compared with 22% in February

On sales

40% of respondents expect sales within New Zealand to increase over the next three months, compared with 35% in February.

While it’s good to see some degree of confidence return to local businesses, and many indicators are pointing in the right direction, we are yet to see a consistency in that confidence,” Mr Barnett says.